Delinquent loans at small and medium-sized US businesses showed tentative signs of having peaked in March, according to figures from PayNet Inc, a firm that tracks trends in the commercial lending market. Loans first falling behind in payment fell slightly on the month for the first time since October, although those more severely behind rose again to hit new peaks for the current US recession.
PayNet on Friday said that accounts in moderate delinquency, or behind by 30 days or more, slipped to 4.37 percent in March from 4.40 percent in February but were still up from 3.5 percent a year earlier. "Three out of every four of the loan issuers in this data set reported lower delinquencies" on the 30-day measure, Bill Phelan, PayNet's president and founder, told Reuters in a telephone interview. "The improvement was mostly among banks. The captive finance business is still seeing problems."
Accounts 90 days or more behind in payment, or in severe delinquency, rose to 1.39 percent in March from 1.31 in February and were up from 1.04 percent a year earlier. Those 180 days behind, or considered to be in default, hit 0.68 percent against 0.65 percent in February and 0.38 percent in March 2008. "We'll spend some time filtering these bad loans through the system," Phelan said, adding that delinquencies are running higher in the current recession than in recent ones. "The recession continues to severely impact privately-held businesses," he said.
PayNet, based in Skokie, Illinois, collects and analyses real-time loan information, such as originations and delinquencies, from more than 200 leading US capital equipment lenders. The company's proprietary database encompasses more than 14 million current and historic contracts, worth some $645 billion.